Experiments in Economics

by Ananish Chaudhuri

Are humans fair by nature? Why do we often willingly trust strangers or cooperate with them even if those actions leave us vulnerable to exploitation? Does this natural inclination towards fairness or trust have implications in the market-place? Traditional economic theory would perhaps think not, perceiving human interaction as self-interested at heart. There is increasing evidence however that social norms and norm-driven behaviour such as a preference for fairness, generosity or trust have serious implications for economics. This book provides an easily accessible overview of economic experiments, specifically those that explore the role of fairness, generosity, trust and reciprocity in economic transactions. Ananish Chaudhuri approaches a variety of economic issues and problems The book discusses how norm-driven behaviour can often lead to significantly different outcomes than those predicted by economic theories and these findings should in turn cause us to re-think how we approach economic analysis and policy. Assuming no prior knowledge of economics and containing a variety of examples, this reader friendly volume will be perfect reading for people from a wide range of backgrounds including students and policy-makers. The book should appeal to economics undergraduates studying experimental economics, microeconomics or game theory as well as students in social psychology, organizational behaviour, management and other business related disciplines.

272 pages, Paperback

First published November 19, 2008

Reviews

[Routledge Economics · Rating 5 out of 5]

This book forms a super introduction to those hottest of sub-disciplines: experimental and behavioural economics. Although I know a little about economics, I am to all intents and purposes, a complete layperson and the minute things become mathematical I start to flounder, so it is testimony to what a good job the author has done that I was able to read through the text pretty much without problems.

I particularly like the applied examples – the Catch 22 motif is particularly apt and there are others from literature including a mention of Les Misérables and other famous novels. The excellent developing countries applications are particularly informative and it is clear that Chaudhuri is really up with all the key research – all the key thinkers’ contributions are commented upon and explained in user friendly terms. Another welcome feature is the proliferation of references to the work of non-US scholars. Rob Langham